How do I accurately determine taxable income to apply 80% rule form 8995?
I am using ProConnect Tax to amend TY 2022 for a new client that has NOL (Sch C) carryforward from 2021.
Income includes W-2, 1099 R (non taxable) & Sch C (net loss).
Deductions: itemized
After entering everything, I am receiving the following critical diagnostic message: " NOL #1: The program doesn't automate the limitation of post-2017 net operating losses to 80% of taxable income, before taking into account any NOL deduction. You must override the amount of post-2017 NOL carryforward absorbed this year so it does not exceed the 80% of taxable income limit. If the net operating loss comes from an estate or trust Schedule K-1, enter the amount absorbed in that screen. US - Ref #53656".
In calculating the taxable income wages less current year business loss Sch C) less itemized deductions (Sch A). My dilemma is Sch A includes medical expenses that fluctuate based on income. How do I accurately determine taxable income to apply the 80% rule?
Wages 44,225
Sch C (10,260)
NOL carryforward 2021 $17,279
